Service providers for Hong Kongs new Mandatory Provident Fund MPF programme must as of today raise capital reserves for MPF guaranteed funds, according to a letter that was sent yesterday Monday by the Officer of the Commissioner of Insurance. The rules also mean additional systems costs to model the new reserve requirements. This has caused a furore among insurance companies, which offer the majority of such funds. Many firms already face a horizon of up to 10 years before they expect to break even on MPF business. The new rules, which could raise costs dramatically, will add to pressures at some small- and mid-sized players to drop out of the MPF business.
The...
